Ultrasonic systems based on ‘smart’ composite structures with embedded sensor networks can reduce both inspection time and costs of aircraft components during maintenance or in-service. This paper assessed the tensile strength and fatigue endurance of carbon fibre reinforced plastic (CFRP) laminates with embedded piezoelectric (PZT) transducers, which were covered with glass fibre patches for electrical insulation. This sensor layout was proposed and tested by the authors in recent studies, proving its suitability for nonlinear ultrasonic detection of material damage without compromising the compressive, flexural or interlaminar shear strength of the ‘smart’ CFRP composite. In this work, CFRP samples including PZTs (G-specimens) were tested against plain samples (P-specimens), and their mean values of tensile strength and fatigue cycles to failure were found to be statistically the same (910 MPa and 713 000 cycles) using the one-way analysis of variance method. The same tests on P- and G-specimens with barely visible impact damage (BVID) showed that the corresponding group means were also the same (865 MPa and 675 000 cycles). Nonlinear ultrasonic experiments on impacted G-samples demonstrated that embedded PZTs could monitor the growth of BVID during fatigue testing, for a minimum of 480 000 cycles. This was achieved by calculating an increase of nearly two orders of magnitude in the ratio of second-to-fundamental harmonic amplitude. Finally, PZT transducers were confirmed functional under cyclic loading up to ∼70% of sample’s life, since their capacitance remained constant during ultrasonic testing.